Managing Asia

Managing Asia

Why one of gaming start-up Razer's early backers almost walked away

Key Points
  • Credence Partners Co-founder Koh Boon Hwee was an early backer of gaming hardware company Razer
  • Koh told CNBC he did not intend to completely cash out as an investor after Razer eventually goes public
Standing still a 'sure fire' recipe for falling behind: Koh Boon Hwee

Gaming hardware company Razer might be targeting up to a $5 billion listing in Hong Kong according to media reports, but one of the start-up's early backers wasn't initially delighted with its business proposition.

Razer — a Singapore-founded company based in the U.S — is best known for its gaming mice, as well as other related gaming hardware and software. The company acquired smartphone start-up Nextbit earlier this year, but remained mum on talk it could enter the mobile space.

"Initially, I wasn't particularly enthralled by the fact this was a hardware business making gaming (mice)," Credence Partners Co-founder Koh Boon Hwee told CNBC's "Managing Asia."

Koh used to head the boardrooms of some of the biggest companies in Singapore, including Singapore Airlines and DBS. Now the chairman of Credence Partners, Koh invested in Razer in 2008, along with 14 other angel investors.

But speaking with Razer Founder Min-Liang Tan got the two talking about extending the business from just gaming-related hardware to building an ecosystem — involving software and platforms — around the gaming industry, Koh said.

Detail of a Razer gaming mouse, taken on March 2, 2016.
Joby Sessions | Maximum PC Magazine | Getty Images

Besides moving Razer beyond "just making nuts and bolts," Koh also noted it wasn't obvious to others in the business community at the time just how large the gaming industry was.

"Gaming is a really, really big business," Koh added, highlighting the professional e-sports space where audiences number in the tens of millions.

"Today, for example, I can tell you that revenues from gaming — hardware, software, games and so on — exceed the revenues generated by all TV, all movies, all books, all magazines, all newspapers combined," Koh explained.

As for his stake in Razer, Koh said the company's IPO plans are not necessarily a means for him to cash out as an investor.

"I tend to be a very long-term holder of companies ... Why would you totally cash out of a business in an industry that is still growing 25 to 30 percent a year?"